VICTORIA — As the B.C. Liberals tell it, they were putting the finishing touches on this week’s update on provincial finances when BC Hydro served up a little surprise.

The government-owned utility sent along some last-minute revisions to its capital plan for inclusion in the budget documents that would be tabled in the legislature along with Thursday’s speech by Finance Minister Mike de Jong.

Much to de Jong’s consternation, the revisions departed from the message he was hoping to deliver — namely, that he’d be making no significant changes in the budget he’d tabled in the legislature before the election.

With Hydro, the news was far from status quo. The capital plan, already the most ambitious in government, had been boosted by another $440 million in the space of a mere four months.

Included were two new projects priced at $274 million and revisions in the cost of a half-dozen others, adding a further $166 million.

Those big numbers ensured that on a day of minimal change in most parts of the budget, the Hydro surprise would dominate much of the coverage.

The most dramatic change in the capital plan involved the construction of a high-voltage transmission line to open up the northwest region of the province to mining development and wean remote communities off dependence on diesel generation.

The Northwest Transmission line was budgeted by Hydro at $395 million as recently as the beginning of 2011, but has undergone a staggering escalation in costs ever since. As of February of this year, it was listed in the budget papers at a hefty $617 million.

But then, on May 23, the Hydro board of directors approved a revised budget of $746 million, $129 million more than the February number and almost 90 per cent above the cost presented in the budget a mere two years earlier.

The latest escalation caused even the government to sit up and take notice.

Finance Minister Mike de Jong described the overrun as “disappointing” and when asked by reporters what he would do about it, he said we should consider that his disappointment had been “expressed” to Hydro.

The New Democrats pounced on the overrun (which had been reported in the Terrace Standard newspaper a day earlier) for the first question period of the postelection session, targeting newly appointed minister in charge of Hydro, Bill Bennett.

In response, Bennett didn’t disguise that he and the Liberals were scrambling for an explanation, having just learned about the overrun themselves.

“We’re not pleased with the additional cost to the Northwest Transmission line that we didn’t know about until very recently,” he conceded. “I can tell all members of the house that I will be meeting often, quickly, with BC Hydro to determine how this happens. Our government does not support this way of managing capital projects, and we will get to the bottom of it.”

Bennett then advised the house that he’d already been given a preliminary explanation from Hydro for the overrun, which he proceeded to recount with a measure of skepticism.

“I am advised that there are a number of reasons for this most recent cost overrun — reasons such as BC Hydro was slow to get started on construction because they had an obligation to negotiate economic benefit agreements with all of the First Nations, and there are several, who are impacted by the line.”

“That delayed the start point of the construction, and I’m advised — I’m telling you what BC Hydro has told me — that in fact that slow start caused them to put additional resources in at the front end of construction, which ended up costing them more money.

“They’ve also told me that with a 340-kilometre transmission line ... they’ve done ten times more blasting than they expected to do, and the costs have been higher. Is that an excuse? No, I don’t think that’s an excuse, but that’s the advice I’ve been given.”

Not a confidence-building explanation, to say the least. And this on a capital plan totalling $7 billion over three years, mostly funded with borrowing. In a year when the provincial gross domestic product is growing at 1.4 per cent, the Hydro debt is growing at 11.3 per cent, eight times as fast as the economy as a whole.

The province is not on the hook for the entire cost of the Northwest Transmission line. The federal government is putting up $130 million and Bennett says that private partners will be contributing more than $180 million.

Still, in a followup conversation, the minister confirmed that he’ll be pressing the utility for better answers on the overrun. In particular, he questions how they could have gotten so far into the project — $280 million already spent at the beginning of this year — without realizing how much it would entail in terms of blasting.

He might try enlisting the assistance of Premier Christy Clark in getting to the bottom of what happened.

Her chief of staff, Dan Doyle, was chairman of the board at Hydro before he joined her office last September.

Then there’s Brad Bennett (a relative of the ex-premiers, not the minister), who rode the bus with Clark throughout the election campaign and is also on the Hydro board. Indeed, he’s a member of the committee of the board that is charged with overseeing management of capital projects.

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